The case examines the supply
chain management practices of
IKEA, the Sweden based furniture retailer. IKEA, the world's leading
retailer by sales had its presence across the globe. The company focused
on providing its customers with affordable yet stylish and functional
furniture. It made efforts to eliminate several activities that added to
the final cost of the furniture
but could be avoided. Its USP lied in its packaging. IKEA designed its
products in a manner to disassemble the whole unit and transport the
parts of the furniture in flat packages. That saved IKEA huge costs in transport. The case explains the evolution of IKEA's business model, expansion strategies, supply
chain planning process,
relationship management with its suppliers, warehouse operations and
store design. It highlights the measures taken by the company to make
its supply
chain
cost
efficient. The case is designed to achieve the following teaching objectives: (1) understand IKEA's business model; (2) examine the supply
chain management practices of
IKEA; (3) appreciate IKEA's innovative method of designing and packaging
products; (4) identify the strengths and weaknesses of IKEA's supply
chain; and (5) evaluate how the efficient
supply
chain system helped IKEA in maintaining low prices.